Why Your Child’s Next Tutor Will Be Online

With school starting around the country, many parents are feeling that twinge of fear — what difficult academic problems will their children bring home this year? That stress can be particularly acute when it comes to math. A recent story in the New York Times reported that up to 20% of adults suffer from math anxiety, and pass that anxiety on to their kids when they struggle to help them with their homework.

Luckily for those parents, it’s now easier than ever for kids to find the help they need online. On-demand virtual tutors are an increasingly popular (and affordable) way for kids to get help. Companies like Chegg and Princeton Review are competing against startups like MathCrunch to win kids’ loyalty and help them succeed.

The market for tutoring and test-prep services in the U.S. is roughly $11 billion, a small fraction of the $1.48 trillion education market, according to GSV Asset Management.

But in Silicon Valley, tutoring is increasingly seen as a hot spot for investments. According to CB Insights, ed tech funding hit $1.87 billion in 2014, up 55% from 2013 and more than double 2012’s $888 million in deals. More than half of the money invested in 2014 was seed funding, which shows the sector is just beginning to take off.

“The way that students learn has shifted tremendously over the past five years,” says Ann Miura-Ko of Floodgate Fund. “They are now driven by the devices in their pockets and at home.”

The old model of finding a tutor and hiring that person to come to your house once a week no longer makes sense for this generation of students. They often need help immediately, and that’s a big part of what attracted Miura-Ko to be part of a $3.5 million seed-funding round for MathCrunch. Founded by 23-year-old Naguib Sawiris, MathCrunch is an app that helps students with individual problems on-demand. Tutoring sessions are done entirely through chat. The student sends a photo of the problem that he or she is stuck on, engages with a tutor and then rates the session. Tutors are trained to help guide the student to find the answer. Sessions can last as few as five minutes or as long as an hour.

“Our core belief is that you can build an education service around chat,” says Sawiris. “It’s what students prefer.”

Sawiris’ first attempt at a startup was an e-commerce grocery app, but the young entrepreneur couldn’t find a good reason for the company to exist. As he saw students sending photos of problems they couldn’t solve to friends and relatives, he realized there was a business there.

“When you spend nine months on an e-commerce site and see it fail, you want your next business to be something that has a clear, positive impact,” says Sawiris.

He’s entering a field that isn’t overcrowded … yet. Tutor.com, which was founded in 1998, is one of the biggest players in the market. The site, which is now owned by IAC, bought Princeton Review last year for an undisclosed sum. It now offers services from tutoring to test prep to graduate school guidance — hitting students at every level of education.

“We’ve seen so many businesses where tech is making things much more efficient,” says Mandy Ginsberg, CEO of Tutor.com and Princeton Review. “Education, because of the way it’s delivered, has been slower to adopt robust technology tools. But in the next 10 years we are going to see a lot of change there.”

These companies are exploiting a gap between how students use technology in school and how they use it at home. While many schools are struggling to bring tablets and online resources into the classroom, they are years behind the ways students are using their phones and laptops at home.

“We see big opportunities in the next few years,” says Ginsberg. “There are still so few brands creating great digital services for students.”

For now, the online tutoring comes at a good price. In-person tutors can cost up to $80 per hour and a student usually has access to the tutor only during the weekly session. Online sessions run closer to $40 per hour but students can dole that out by the minute. So if it takes only 10 minutes for a tutor to help a student find an answer, that student still have 50 minutes left to use at another point for future problems.

The new online tutoring world is also providing a way for cash-strapped teachers to earn some extra money. Because location no longer matters, teachers in small towns can help students in any part of the country at whatever hours are convenient.

It remains to be seen just how big this market can grow. In April I wrote about a company called StudyTree. Started by some college students at Drexel University, the app matches students with tutors who then meet in real life. In the past few months, usage of their app has tripled.

And there’s still an opening for the unicorn of the tutoring world.

“We want to be an international brand,” says Sawiris of MathCrunch. “Mobile has transformed the opportunity around tutoring and we believe we will be the next big thing.”